“Put that coffee down. Coffee is for closers.” — Glengarry Glen Ross
Start quoting this movie scene to anyone who has worked in sales and they are likely to finish it with a smile. Aside from its quotability and foul language, the scene is notable for another reason: There are no women in it. Not a single woman is part of that sales force.
Granted, the play and movie were written decades ago. Times have certainly changed.
In many ways, the answer is yes. Women now have a significant presence in sales forces in many industries. However, the current data shows that most industries could do a better job at bringing more women into sales and helping them to succeed—whether that means meeting and exceeding sales goals or moving up into a management role.
There is a strong business rationale for ensuring an adequate female presence in the sales force. Women bring different skills and perspectives to sales. They tend to be good listeners and excel at nurturing relationships. And, most important, organizations with strong gender diversity outperform less diverse companies on several financial measures.
In this article, we will look at:
- The state of women in sales.
- Why increasing the number of women in sales matters from a business and financial perspective.
- The steps companies can take to attract and retain women in sales then help them succeed.
The State of Women in Sales
Although women hold roughly half of all sales positions according to the latest data from the U.S. Bureau of Labor Statistics (BLS), the breakdown by industry tells a different story.
It starts at the top. Women in top sales executive positions are rare. Consider the technology industry. A 2014 study conducted by law firm Fenwick & West LLP found that women held only 11.7 percent of the senior sales executive roles among 150 largest companies in Silicon Valley (as measured by revenue) that have such a position (77 of the 150 companies). Moreover, only one woman has held the top sales executive role in any of the top 15 companies in the group over the 19-year period the study has existed.
While these numbers represent a single industry, the situation is common. Women hold fewer management and even fewer executive sales roles than men. The BLS data shows that women make up just 26 percent of sales supervisors in all non-retail industries.
This lack of women in leadership is not likely to help increase the number of women among the rank-and-file sales roles. With few role models in management, women miss out on opportunities for mentoring by and networking with colleagues who are more likely to have had similar career experiences and faced similar challenges.
Further down the sales ladder, the ratio of men to women in sales is considerably skewed in some industries. Data from BLS shows the very low percentages of women holding sales positions in:
|Wholesale and manufacturing||29.3%|
|Securities, commodities and financial services||32.5%|
Further, research from the LinkedIn user network indicates that growth in the percentage of women in sales lags behind the percentage of women in the workforce as a whole. The percentage of women in the workforce, as measured by the LinkedIn user base, increased from 37% to 41% between 2004 and 2014. However, the percentage of women in sales grew slightly less, going from 36% to 39% during that same time period.
Why Does It Matter?
Bringing more women into sales roles at every level quite simply makes business sense. In a hyper competitive environment, companies must consider every viable candidate for sales positions. If a company, business unit or sales manager consciously or unconsciously passes over female candidates in favor of equally or less qualified male candidates, that organization is likely to be missing the opportunity to hire very talented people. And the effects will add up over time.
Bringing more women into sales roles at every level quite simply makes business sense. Eliot Burdett, CEO of Peak Sales Recruiting
A more diverse sales force also is more likely to reflect the make-up of customer organizations and have representatives that can connect and nurture strong relationships with a diverse customer base. If everyone in the sales organization looks the same and has similar experiences and viewpoints, they may not always be able to find common ground with customers and prospects.
The Financial Side
Equally important is the financial aspect of the matter. Research shows that companies with greater gender diversity outperform less diverse companies on several important metrics, including sales revenue, number of customers, market share, profitability and overall earnings.
A 2009 study conducted by researchers at the University of Illinois at Chicago found that each incremental increase in gender diversity could result in nearly 200 more customers and a three percent increase in sales revenue. In addition, the table below shows the differences in company performance on four key financial metrics based on levels of gender diversity. The bottom line is that companies with greater gender diversity perform better than those with lower levels of gender diversity.
Table 1: Impact of Gender Diversity on Company Performance
|Level of Gender Diversity|
|Characteristics||Low <20%||Medium 20–44%||High 45%+||Overall|
|Percent in gender diversity category||28||28||44||100|
|Mean sales revenue (in millions)||45.2||299.4||644.3||456.3|
|Mean number of customers (in thousands)||20.5||27.1||36.1||31.9|
|Percent with higher than average market share||45||58||62||56|
|Percent with higher than average profitability||45||58||62||56|
Another study conducted by strategy consultants McKinsey & Company (registration required) finds a similar gender diversity dividend. In this case, the study found that companies in the top quartile for gender diversity are 15% more likely to generate financial performance above their national industry median than their peers in the bottom quartile for gender diversity. The study includes data from 366 public companies in a range of industries and operating in Canada, Latin America, the United Kingdom, and the United States.
“More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns,” according to the McKinsey study report. For example, companies in the United Kingdom experienced a 3.5 percent increase in EBIT (earning before interest and taxes) for every 10 percent increase in gender diversity.
If you need more convincing, a Gallup study of the different business units of two companies in the retail and hospitality industries shows significant differences in revenue and net profit based on the level of gender diversity in each business unit. Those business units with higher gender diversity have:
- Higher revenue (5.24 percent vs. 4.58 percent, a difference of 14 percent).
- Higher quarterly net profit ($16,296 vs. $13,702, a difference of 19 percent).
- Revenue that is 46% (retail) and 58% (hospitality) higher when they combine greater gender diversity with higher levels of employee engagement.
Gender Diversity in Hiring and Onboarding
In general, improving gender diversity requires a concerted effort to increase the number of women in sales roles and to support talented women to move up into roles with greater responsibility.
While the data exists to make the business case for improving gender diversity, changing the situation requires additional and careful thought and action. The first step is for companies to determine whether they do, in fact, have a gender diversity problem in sales. Only with that information can companies identify whether anything needs to change. Then if they do have a problem or just concerns about maintaining gender diversity, they need to identify the best way to address the situation.
A good first step is to break down gender diversity data in subgroups that reflect how the sales force is organized. For example, company-wide or business unit data can provide important high-level insight into the state of gender diversity overall. Breaking down data by product line, division, geographic location and so on can help pinpoint where gender diversity is weakest and, potentially, what is causing the problem.
With that targeted information, companies can focus their efforts and identify the underlying reasons for this lack of diversity to develop an appropriate response. It is important to emphasize that any such efforts are not “quotas.” Few things will prevent new salespeople from thriving than any sense that they are there just to fulfill some vague diversity metric.
The key is to develop hiring processes that focus on merit but do not put women at a disadvantage simply because they are women. For example, sales managers might have a bias, unconscious or not, against hiring women who have or are likely to have children, perhaps thinking this will get in the way of necessary travel or curtail their time on the job. A targeted intervention can help the manager recognize that tendency and take steps to impose more objective criteria for evaluating candidates. Holding those managers accountable for maintaining an appropriate level of gender diversity is also important.
“Organizations culturally look for sales leaders with a certain type of persona, and female sales leaders, while still achieving extraordinarily high results, might not be perceived in that same vein.” Jennifer Sullivan, a Senior Executive at Allego
Effective onboarding is also critical. Like any new salesperson, women in sales want to succeed. And to succeed they need fairness. To that end, sales and human resource executives must ensure the playing field is even from the very beginning. Otherwise, female sales representatives may not be able to maximize their performance.
Consider what happens when onboarding does not support female sales representatives. A study of brokerage sales in two financial services firms conducted by researchers at the University of Pennsylvania found something the researchers called “performance-support” bias, which inhibited the earnings and success of new female sales representatives. The study considered situations where female sales reps received inferior sales support and inferior sales assignments compared to their male peers. Not surprisingly, this situation impacted those reps’ performance. In this case, the study found that women under-perform when they assigned inferior accounts but “produce sales equivalent to men when given accounts with equivalent prior sales histories.”
“There has to be a culture and a good performance management system in place that does the best it can to remove gender biases, or really biases of every kind and looks at performance.” Bridget Gleason, Senior Vice President of Corporate Sales at SumoLogic
It’s Also About the Whole Sales Force
Changing hiring and on-boarding processes can certainly help increase the number of women in sales organizations. However, going through the steps to identify and address gender diversity can also help companies to improve sales support structures and processes for the entire sales organization. In other words, if the existing sales organization is not fully supporting the women working there, chances are good that it is not supporting some of the men too.
This is why companies need to consider how their own internal processes and culture, particularly the sales culture, impact the performance of the sales force. Initial changes may allow companies to hire and on-board more women into sales roles. However, how long will those women stay with the organization if its overall culture and sales culture do not support or value them?
The answers to these questions do not just impact women in the sales organization. Any changes could yield a better environment in which everyone can thrive. That means thinking through the type of salespeople the company is actively trying to recruit and whether those individuals will become the type of sales force the company wants and needs to succeed.
“(T)he first step for anyone selling, managing, or hiring a salesforce is to understand these dynamics between personality, self-perception, and role,” writes Philip Delves Broughton, author of “The Art of the Sale,” in Harvard Business Review. “Identify the conflicts so that selling feels as normal and natural as it should.”
Broughton cited the approach taken by Ashok Vemuri, the head of Americas at business process outsourcing company Infosys. “(Vemuri) looks for…intelligence, curiosity and an agile mind. The chest-beating Alpha male of sales myth has no place in this universe. Rather, it is the low-ego character who regards client service as the highest goal who thrives. He is looking for people who can make others comfortable, who are articulate, and who are able to deal with the unexpected.”
Seeking out gender diversity is crucial. “Sales execs want to hire sales reps with ‘killer’ instincts and sales ‘animals’ who perhaps were high school or college athletes,” says Lori Richardson of Score More Sales. “Those descriptions don’t always include smart, collaborative, innovative women. We like people like us, and what is not sought after is not found.”
“I was repeatedly told that I needed to “play with the big boys” and to “get in bed” with my customers. I learned that it was a “war” out there; that my competitors were the enemy and my job was to destroy them. [So] instead of focusing on products, services and slimy sales techniques, I focused on my customer. That’s the only thing that mattered to me. I wanted to understand their status quo, their challenges and their objectives.” Jill Konrath, Keynote Speaker and Best Selling Sales Author
The description of the right salesperson for any organization needs to be gender neutral. Only specific people will have the necessary attributes to excel in any specific selling environment and there is no reason to think that either men or women have a monopoly on those attributes. Therefore, there is nothing keeping an organization from hiring and nurturing a gender diverse workforce if only they look for it.